The numbers and the trend speak for themselves

In a crisis, the left virtually froze wages while raising taxes and prices. Fidesz reduced taxes and maintained the rising trend, jobs and developments

The numbers and the trend speak for themselves

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Indirectly, almost everyone is affected by the amount of the minimum wage

The income of millions of Hungarian citizens would increase if the amount of the minimum wage increased to two hundred thousand forints in one or two steps. The indirect effect of the almost 20% increase would be to increase the minimum wage to a similar extent, thus accelerating the catching up of higher-paid workers. In addition, many benefits, such as gyed or sick pay, are calculated on the basis of a mandatory minimum wage, so the amount of benefits would increase substantially.

At the earliest, the wage negotiations starting in the autumn will show how the goal announced by Prime Minister Viktor Orbán, ie the minimum wage of two hundred thousand forints, can be achieved, and what other measures, mainly supporting small and medium-sized enterprises, may be associated with the significant increase.

The Prime Minister emphasized that the mandatory minimum wage of two hundred thousand forints can only be achieved in one or two steps so that the increase does not endanger the operation of smaller enterprises. For example, a tax cut could be an effective step.

Viktor Orbán also stated that the minimum wage and the guaranteed minimum wage must be agreed between the social partners, ie the trade unions and the employers.

At the same time, it is already conceivable that the parties intend to conclude a similarly far-reaching, long-term agreement, generating a substantial earnings catch-up, after the wage agreement reached in 2016, which includes a significant wage increase and tax cut and expires in 2022.

As part of such an agreement, it is conceivable that the minimum wage will increase to two hundred thousand forints in 2022 from the current 167,400 forints.

To do this, a one-step increase of 19.5 percent should be agreed by delegations in the fall. It would not be unprecedented to have such a far-reaching increase in minimum wages: in 2017, the guaranteed minimum wage increased by 25 percent and the minimum wage by 15 percent.

An increase in the mandatory minimum wage of almost twenty percent would directly affect a small percentage of workers, only five to seven percent.

At the same time, its indirect effect is extremely diversified, it can contribute to a substantial rise in the living standards of millions of Hungarian citizens.

The gross increase of HUF 33,000 directly affects 250,000 employees officially working for the minimum wage. Hungary applies two types of minimum wages. If the minimum wage were to increase by almost twenty percent in one or two steps, the higher guaranteed minimum wage of HUF 219,000 this year, which now affects about one million employees, is expected to increase by almost the same amount.

This would result in a gross wage increase of almost HUF 45,000 for those employed for the minimum wage. In this case, employers would have to raise even in higher salary categories.

Taking into account the spillover effects of the two hundred thousand minimum wage, the salaries of up to two million employees would increase, and Hungary would also gain a significant advantage in the regional wage competition.

A substantial increase in the minimum wage would not only improve the income situation of workers, as the mandatory minimum wage is the basis for calculating many social benefits.

The current minimum wage also affects, for example, the amount of the gyed, such as the grandparent's gyed, sick pay, jobseeker's allowance or, in the case of certain illnesses, the employee tax base reduction allowance.

The gyed, for example, cannot be higher than seventy percent of twice the minimum wage, ie 234 thousand forints this year. If the minimum wage were two hundred thousand forints, the ceiling of the amount of gyed would reach 280 thousand forints, so several parents with small children could manage up to fifty thousand forints more per month.

The minimum wage also determines the amount of the tax base reduction that can be applied to certain diseases, such as diabetes or certain metabolic disorders. With the minimum wage rising to two hundred thousand forints, those affected may have up to thirty thousand forints more money per year than at present.

Many are affected by sick pay, the daily amount of which cannot exceed one-thirtieth of the minimum wage, ie now HUF 11,130. With the increase of the minimum wage by almost twenty percent, the daily ceiling of the amount of sick pay would increase to HUF 13,400.


Tags: Left-wing destruction  Living